District of Columbia: Sales Tax Handbook
How to file your sales taxes in District of Columbia
Once your business has a District of Columbia sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the District of Columbia government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In District of Columbia
The District of Columbia has very simple rules when it comes tocollecting sales tax. There is only one sales tax applied to this area. This means that essentially any business, in state or out of state, which has tax nexus in the District of Columbia is required to pay the flat rate sales tax, which is 5.75%.
Sales Tax Collection Discounts In District of Columbia
While many states allow merchants to keep a small percentage of the sales tax they collect as a collection discount, or compensation for the work put in collecting the tax on behalf of the state, District of Columbia does not currently allow this.
Your District of Columbia Sales Tax Filing Requirements
To file sales tax in the District of Columbia, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the District of Columbia, all taxpayers are given several options for filing taxes. One is filing online using D.C. Freefile. Payment can also be remitted through this online system. You can also file manually through the mail in the District of Columbia, by using the either form FR-800Q(for quarterly filing) or FR-800M(to file monthly). It must be noted that if the sales tax liability is equal too or greater than five thousand dollars, you are legally required to both file and pay online.
Tax payers in the District of Columbia should be aware of late penalties the district applies. The penalty for late filing is 5% of the tax due for each month or fraction of a month that the filing is late, with a maximum compounded interest of 25%. The penalty for late payment is the same.
The District of Columbia requires that a seller who owns a sales tax permit files sales tax return on the required day, even if the tax return would have been "zeroed-out", and there is nothing to report.
Your District of Columbia Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of District of Columbia sales tax filing due dates.
Where To File Your District of Columbia Sales Tax Return:
Filing Your District of Columbia Sales Tax Returns Online
District of Columbia supports electronic filing of sales tax returns, which is often much faster than filing via mail.
District of Columbia allows businesses to make sales tax payments electronically via the internet.Taxpayers are required to make electronic payments when the payment that is due for the tax period is greater than twenty thousand dollars, and for payments which are completed by a third party bulk filers.
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